BNM likely to maintain current OPR for rest of year: MIER
Published on: Wednesday, July 23, 2014
Kuala Lumpur: Bank Negara Malaysia (BNM) is likely to maintain the current overnight policy rate (OPR) for the rest of the year, says the Malaysian Institute of Economic Research (MIER). Its executive director, Dr Zakariah Abdul Rashid, said the recent increase of 25 basis points was timely to curb the rising inflation and high household debt. "I don't think there will be a new increase in the immediate future. We have to monitor it closely because the upward adjustment of 25 basis points was only done in July.
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"Let's see how the economic environment react to it," he said.The central bank increased the OPR by 25 basis points to 3.25 per cent early July while the floor and ceiling rates of the corridor for the OPR were correspondingly raised to three per cent and 3.50 per cent respectively.Inflation is expected to be at three per cent in 2014, driven by several factors including the implementation of goods and services tax, increase in OPR and continuous subsidy rationalisation, said Zakariah."All these will add to inflationary pressures. Everybody has factored in goods and services tax, even it is not being implemented yet," he said.
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He said the Malaysian economy was likely to achieve a growth of between five per cent and 5.2 per cent growth in the second half of 2014, driven by domestic demand. Stay up-to-date by following Daily Express’s Telegram channel.
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On the currency, he said, the ringgit was likely to continue its upward momentum for the rest of the year in line with economic fundamentals and strong demand for exports, especially from the US and eurozone. -Bernama
